Two days before Reserve bank's Quarterly review of the monetary policy which is scheduled for Oct 27, Prime Minister Manmohan Singh expressed satisfaction with the apex bank's stance on the monetary policy and said that the bank was a competent authority to decide on the interest rates.
Answering the queries on a likely tightening of monetary policy Singh said "These are the matters on which the RBI Governor is competent to take the decision."
He also said that the Reserve Bank governor is a high dignitary and therefore the questions related to interest rates, money supply should be addressed to him only.
Singh said that he was satisfied with both the monetary and fiscal policies since they coincided with the government's requirements, adding that monetary policy was the ‘exclusive domain' of the RBI.
Increase in inflation and industrial production has raised concerns about tightening of the monetary policy. However, RBI is expected to maintain its key rates in order to boost the Indian economy Analysts do not expect the apex bank to change its repo rate, the rate at which it lends short term funds to banks or the reverse repo rate, the rate at which banks park their excess funds with the regulator bank.